The superfluous equipment makes me anxious as it introduces unnecessary complexity to what should be a simple, get fit through functional exercise. I don't know what drives people to make these purchases (chalk stand?!), maybe these suckers value aesthetics more than money in their pocket?

I must admit, in the past I have fallen prey to equipment marketing, I have bought TRX imitations, medicine balls, pull up bars with the best intentions of using them to inspire a new healthy home exercise regime, but these are now collecting dust. It has only been the introduction of building exercise into my daily routine that has been effective. I'll keep them with the hope that some day soon I'll make use of them, or if I haven't unboxed them by next year they are going to charity.

I think most people are just trying to buy their way to fitness, and the marketers are only to happy to sell you their wares.

Minimalism and decluttering had an unforseen side effect for me. I clean up a lot more!
When you throw away all your shit, everything that you are finally left with, will naturally find a space in your home where it quite simply 'belongs'. With fewer possessions, it becomes immediately clear when something is not in its place, because it LOOKS out of place. Then you'll most likely put it back.
I don't think it ever takes more than 5 minutes to completely put everything back in place in the evening, before we tuck our daughter in, but I still find myself putting things back in place during the day. This way I am now putting things back in place, maybe 4 times a day, rather than just once.

That was really not the intention when paring down my possessions so now I'll have to learn NOT to put things back in place until it's time for bed.
I'm usually someone who lives in a big mess at home. Odd that I am now someone who declutters.

In the same vein, using habitica.com to manage my TODOS and daily tasks means that I am now staring at a stupid pixelated app 8 times a day to check off things rather than just do it once per day. It somehow draws attention, merely by existing.

It's funny how simplifying one's life often leads to simple diversion of attention, rather than actual simplification. I reckon the actual simplification sets in once those idea have become habits or a fundamental philosophy, rather than something you spend mental resources on.

This then distills down to the essence of simplicity; simplicity is getting the results while spending fewer resources getting them.

There seems to be a constant stream of stuff into my house, so clutter is a serious issue, I like to blame SO for the accumulation of tat, but it's my fault too as I have very limited dedicated storage space. Don't even have a bookshelf/case. Just cardboard boxes

I found that I am the only one who's attitude towards purchases has fundamentally changed. My GF is with me to some extent, but she hasn't internalized the idea of not owning shit to the same degree I have.

When our apartment was cleaned of shit, it was me who dug everything out, moved the furniture about, hauled shit to the dumpster and rummaged through construction materials and old dusty cardboard boxes. I hoisted shit down the stairs and hauled bags of recycled clothes to donation centres. I was the one who underwent the mental process of reflecting on my former purchases and why I chose to keep those things, and how liberating it was to get rid of it.
I have a feeling she merely threw stuff out because I was doing the same, without reflecting on it, and thus not learning anything substantial in the process.

she didn't go all the way either. She has thrown away some of her unused clothes, but she didn't want to touch our kitchen stuff, our decorations or ANYTHING related to sentimentality at all.

I got rid of almost everything that wasn't of any use to me anymore, and I'm still eyeing stuff to give away.

She still wants to buy toys and multicolored tutu skirts for our daughter, I'm the one who points out that the little one doesn't play with toys nearly as much as board game stuff, kitchen utensils and our furniture.

If you draw a Venn diagram of what you buy children under the age of 2 and what they play with, I'll wager the intersection of the two is VERY small.

In short: Decluttering and paring down your possessions is very much a mental journey. If one has never reflected on the difference between the price on a price tag and the total cost of bringing that thing into your home, one cannot be expected to tame one's purchasing habits.

I scheduled a Financial-Independence-expectations meeting with my GF.
We adjusted our 'future' budget to something we find very tolerable. I pointed out that our savings rate would then be about 63%

After discussing a bit back and forth I booted up portfoliocharts.com and went to the firetime calculator.
First I punched in:
20 large cap value
20 europe
20 international small
30 5 year treasuries
10 gold.

We both watched the firetime spread converge to something nice.
Then I altered the savings rate from 50 to 63 and the words out of my GF's mouth was: Fuuuuuuuuuuck...
The next thing I said was: now do you understand why I am so adamant about cutting costs?

Given that I've been talking about cutting expenses for the last two months, she now has the mantra imbedded in her head. Now she understands why.

--------------

I am restudying The Intelligent Asset Allocator. I have come to accept that my studying habits for the last 8 years have been very work intensive and not nearly as result intensive as one would think. Basically I have spent a lot of time getting nowhere. So now I'm studying the book rather than just reading it.
Given that I have studied, mesocopic experimental physics, theoretical chemistry, high-performance computing and now statistics and X-ray Free electron laser photophysics I have added another layer of complexity on top of my studies.

I have therefore throttled back a bit with regards to reading new info on investing. I reckon I need to learn how to learn better before I tackle the knowledge that will supposedly buy me bacon and whisky for the rest of my life.
So the order of operations is now:
1) Get a hold of my mentality, my outlook and my life philosophy.
2) Once that is rolling I need to get a hold on proper didactics.
3) Then I need to understand investing.

So far the plan is thus to study stoic philosophy then mathematical didactics, then start from the Boglehead's and see where I want to go from there.
The next financial step might in fact be to understand Danish taxation laws more than I need to know more about investing...

------------

Kettlebells are doing 'wonders' for me. The apartment where I live actually has a small gym floor in the basement so I am 4 minutes away from my gym. I'm losing weight almost instantaneously, even though that was not really the idea. I will let the cast iron determine how I end up looking. As long as I'm strong and fit I don't care about the aesthetics. But... Since I read a cruiser to work for 80 minutes every day, adding KB swings on top means that I am running out of notches in my belt.

I have NO problems with my leg strength or my aerobic fitness, but my grip is giving out after about 5-6 minutes of swings. I'm looking to find out how to buff my grip even further, 'cause right now it's holding me back quite a lot.

GF got so jealous of my immediate gains that she ordered her own set of kettlebells, so now we're almost a 5 KB household.

------------

My Information diet is going swimmingly. It's incredibly liberating not to read the news or any kind of social media.
I am now strictly doing a TODO every evening. The list has 3 or 4 things i MUST do the next day.
So far I've done all those things for 11 days straight.
As long as I am not abusing habitica.com, it seems to be a very good way for me to keep track of what I should be doing.

------------

I unplugged the TV.
The 2 year old took a single day to adjust, now she wants to read all the time.
Win-fucking-win!!!

In case you're wondering: UNPLUG YOUR FRAGGIN' TELEVISION! DO IT NOW!

------------http://www.amazon.co.uk/Guide-Good-Life ... +good+life
Stoic philosophy really rings a bell with me. 'Negative Visualization' has immediate impact.
The effect really is staggering. So far I'm about 40% through the book and I find it incredibly applicable. Maybe because I have lived like that for some time, maybe it's because I recognize so much from modern Mindfulness.

------------

My PhD schedule until June looks like it's absolute crap.
I will need stoic fortitude to endure.

Merry festive times and Happy New Year all you Pagan, (possibly) filthy atheist, money grubbing, cheapskates reading this.

It's instructive to plot 100 Stocks and watch the red spots, then plot 100 gold and watch the green spots. It reminds me why a diversified portfolio probably should have a little bit of gold, in case you want a bit of balm against market crashes.

I scheduled a Financial-Independence-expectations meeting with my GF.
We adjusted our 'future' budget to something we find very tolerable. I pointed out that our savings rate would then be about 63%

After discussing a bit back and forth I booted up portfoliocharts.com and went to the firetime calculator.
First I punched in:
20 large cap value
20 europe
20 international small
30 5 year treasuries
10 gold.

We both watched the firetime spread converge to something nice.
Then I altered the savings rate from 50 to 63 and the words out of my GF's mouth was: Fuuuuuuuuuuck...
The next thing I said was: now do you understand why I am so adamant about cutting costs?

Given that I've been talking about cutting expenses for the last two months, she now has the mantra imbedded in her head. Now she understands why.

That totally made my day! It's exactly how I hoped people would use that calculator. Thanks for sharing.

Nice! It's always very interesting to me exactly how to produce an epiphany in people. Originally for me, it was the realization that I could invest at higher rates than the 2% interest my bank paid on my savings. Raising that to 4% almost did it. When I wrote the book, I figured a parameter plot of savings rates and working years would do it---because after all, everybody understands such plots, right? With DW, the epihany happened when she made her own "spreadsheet" of the standard kind that projects income, expenses, savings, and passive income.

In general, to understand anything, the person has to be capable and ready. I think as outside "influencers" we have to focus on capable ... and then wait on ready?

Construction:
I patched up the front door so it's no longer drafty. The effect was immediate, as in within 30 minutes the hallway felt warmer. I fixed other stuff in the apartment as well, and it really reminded how nice it is to build things. I'm quite certain I'm going to run a small construction company at some point in life. If I can't buy a farm with a wood shop, I'll have to make due with patching up small stuff and installing dry wall.
Almost every constructions site in Copenhagen has an open container with all sorts of old furniture and doors thrown out. I'm seriously considering salvaging stuff and building recycled furniture from it. For sale of course.

Reading:
I'm done reading the Intelligent Asset Allocator and I'm re-reading The Four Pillars of Investing. I'm contemplating how much I should read up on value investing. I understand the merits of value investing, but if I plan on indexing my investments, how useful is a thorough knowledge of value investing really?
I know that all knowledge is ultimately useful, but I want to focus on what is most important first.
Portfolio strategy so far: probably up to 10--12% gold, value investing split between large cap and small cap. International diversification as much as taxably comfortable. approx 25 % bond exposure. Thus, 10% gold, 25% short-term bonds, 65% stocks. Stocks are probably split like a coward's portfolio in 21/21/21 segments between US large cap value, small cap value, Int'l value, Europe. The pixel chart from portfoliocharts.com shows me that after 10 years the portfolio is yielding the expected 4% or more, unless I start investing right at the begining of an oil crisis, a crash, an IT bubble or right as the world's banking system goes to pot...

HOWEVER, all this value investing might yield a lot of unwanted capital gains, so this is all very academic until I've talked with an investment/tax lawyer.

Portfolio Planning:
I guess I'll be starting my investment this year so I'll need the necessary knowledge to build an outline of a portfolio and start value averaging into the portfolio over time.

The rough outline so far is to save about 23 years worth of expenses, then rely on the bat-shit crazy unemployment benefits for a few years and then drop out of the financial support system, since the returns from the portfolio can most likely fill in the remaining 2 years of expenses in the portfolio to reach the 'magical' 25 years worth of savings.

I reckon we'll keep about 2 years worth of expenses in cash to buffer bear markets. I want to work on the side, consulting or construction. I like to do math, programming and building, just not every day. Even modest amounts of work, like a month or so, should cover 1/3 - 1/4 of living expenses for a year.

Danish taxes, as always, is the biggest hurdle I have to cross right now.

The FI Budget:
I can't decide whether our FI budget is robust enough to handle up/down swings. Mostly I imagine that we'll probably find more and more excuses to go hiking all over Europe/the US, so we'll need a travel budget. I guess any work I do would go into the travel budget in case we don't need to money to weather an extended bear market.

Housing:
GF is still looking for apartments to swap. I'm starting to think it's absolutely doable soon. If only I could get her to declutter, then moving would probably come automatically once we see how much surplus space we have.
We are actually considering buying an 'owned' apartment in case the market crashes significantly. Currently we live in a type of apartment where prices are regulated, rather than being sold at market price. We might indebt ourselves, but the added price of re-selling the apartment later should most likely recoup the cost. We'll have to check up on what kinds of loans are available in order to assess whether it's a plausible strategy.

Being a carpenter really helps my outlook with regards to housing. If it's crap, I'll just fix it myself and sell it. Luckily the Danish government already thought of this, so naturally I have to pay taxes off of work I do in my own home... Yes, you read that right.

Last edited by FBeyer on Mon Jun 13, 2016 12:18 pm, edited 1 time in total.

Unfortunately portfoliocharts.com already exists, otherwise I would have built my own, advertised and monetized it
Fortunately portfoliocharts.com exists and shows me with great and unnerving clarity, that no matter what kind of portfolio I build, solid CAGR does not manifest itself until after about 8 years. Almost every portfolio has a tremendously bumpy birth.
Stick with it, believe it, and if you're going though hell... Keep going!

I just realized I should probably know something about dividend investing as well as value investing.

I could probably write a ten page essay on children and frugal living, and why it's important not to have kids before you're FI. I might write a piece on that once I gather my thoughts.

So with regards to ERE:
I've now contributed a total of 17000$ to my GF's mortgage from November to January (the tax legal maximum in Denmark).
Since I still owe her rent for all of 2015, she's getting more money still.
We could potentially be looking at paying off more than 44000$ dollars in about 8 months. Not that we can sustain savings like that, we just haven't spent any money the last 5/6 years so we might as well put it to good use.

This also means that I will probably start building my portfolio some time after summer. By that time I have a cash buffer for value averaging, I'll be about 4 investment books smarter and I'll most likely have a better idea of what kind of portfolio I want to build and what kind of portfolio my GF wants to build.
I'll most likely be kind-of heavy in stocks, she'll be heavy in super-duper-lazy safe investment, with a minimum of stocks for good measure. I'm fine with working after FI. I can't imagine NOT making money somehow, so it's all good in that regard.

Just wanted to say that I find your financial education journey particularly fascinating. I've always struggled answering the "where do I start" question, but you seem to be setting a pretty darn good example.

I think there's something to that. I certainly share the same systems-thinking proclivities, and suspect it's a common trait among ERE types. When building a robust system is simultaneously fun and stimulating, that's a particularly productive intersection of opportunity and motivation.

Tyler9000 wrote:Just wanted to say that I find your financial education journey particularly fascinating. I've always struggled answering the "where do I start" question, but you seem to be setting a pretty darn good example...

Thank you.

If I am setting a good example, it means I'm doing something unusual in regards to what you have observed before. What is this difference then?
I only know of one way to start something new: go absolutely crazy with information, pile on knowledge, start sorting the heap, and start asking questions.

I just browsed through this journal and we have some similarities. I love the idea of having a life philosophy and basically just living in sync with that. My take is that your life philosophy should include spending and investing.

I also love that stoicism book and I am a big fan on index investing and simple living.

I am finding similarities with your thought process and evolution too. Actually, I finished reading "Four Pillars of Investing" yesterday and I have "The Intelligent Investor" in the shelf. I am also kind of reluctant to spend quite a few hours reading on value investing since I am more inclined towards a Permanent Portfolio. I guess learning doesn't hurt, but maybe right now I should focus on other things.

On dividend investing: You and I are from Europe, so we have acess to "accumulation ETFs" that don't distribute dividends. I don't know about Denmark but in Portugal the dividends are highly taxed, so I would prefer to defer the payment of those taxes to when I am selling some ETF shares to fund my early retirement. Because of this I am also reluctant to study much about dividend investing.

FBeyer wrote:
If I am setting a good example, it means I'm doing something unusual in regards to what you have observed before. What is this difference then?
I only know of one way to start something new: go absolutely crazy with information, pile on knowledge, start sorting the heap, and start asking questions.

You already answered your own question. IMHO, too many people just want answers, not knowledge. And they definitely don't have the patience for wisdom.

Beyond that, two particular things that stick out are the fact that you started with reducing spending and maximizing savings and only then got into investing, and your self-awareness about what motivates you as an investor.

Noided wrote:@ FBeyer
On dividend investing: You and I are from Europe, so we have acess to "accumulation ETFs" that don't distribute dividends. I don't know about Denmark but in Portugal the dividends are highly taxed, so I would prefer to defer the payment of those taxes to when I am selling some ETF shares to fund my early retirement. Because of this I am also reluctant to study much about dividend investing.

EVERYTHING is highly taxed.
27%/43% on capital gains, dividends I believe are taxed like regular income and accumulating funds are taxed annually as the difference in value from the beginning of the fiscal year to the end of the year, unless I sold them during the year in which case the sales price substitutes the end-of-year value.

I'm taxed if I sell, I'm taxed if I don't...
You read that right.

You're not supposed to invest your money in DK, "only rich people do that", and "we" don't like rich people.

My tax management thus revolves around putting money into different tax bins and shuffling income around between them.
Thus the personal income bin, the dividends bin and the capital gains bin have to be weighted against each other, on top of the portfolio diversification in order for my FI to make any kind of sense. I can't just invest in small cap value stocks around the world, 'cause they throw off too much capital gains to make sense. I actually NEED gold, not just for bear market protection but also for loss-harvesting. Now I just need to read up on the rules for wash sales in DK

FBeyer wrote:
EVERYTHING is highly taxed.
27%/43% on capital gains, dividends I believe are taxed like regular income and accumulating funds are taxed annually as the difference in value from the beginning of the fiscal year to the end of the year, unless I sold them during the year in which case the sales price substitutes the end-of-year value.

What?? you are taxed every year even if you don't sell? Jesus...

What's your savings rate and at what % of FI are you if you don't mind me asking?

A truly bizarre opportunity has presented itself.
We can buy a small house. Rent, heating, electric etc. will be 50.000 per year, currently we're at 100.000 per year (exchange at 685.21).
The catch is that we'll be moving into 30m2 less, which is actually fine by me, and we'll have to take out a loan of 300.000.
We KNOW that we can pay off that amount of money in a very short time span, but I'll have to sit down and make an estimate of the long term costs of moving.

In the short term, we'll have to pay off a loan. In the long term, we're looking at almost 20% savings rate, just from moving and from eating primarily non-organic food. So, do we want to delay the accumulation to pay off debt, but then know that we're living almost as cheaply as one can in a 90m2 house in Copenhagen area, or do we want something that does not require taking out a loan, but with an even higher rent per year? 2 years to pay off loan, 5-6 years to accumulate money for FI. 'seems lucrative somehow

The mind Heinrich! It boggles!
-----------------
I've also fallen into a classical motivational trap, by communicating my intentions about becoming Financially Independent, my mind is telling me I'm already there (sort of). Not really, but I can tell the feeling is there in the back of my mind.
I need to get grounded mentally again
-----------------
I'm now reading How I Found Freedom in an Unfree World. I find Browne's way of argumenting very lacking. I can tell he's a bit of a political anarchist, but he's not making a very good case I think. It's not that I can immediately tell what's wrong with his argumentation but I feel there are holes that need patching. As someone who is constantly confronted by people with superior knowledge and reasoning skills, I've become tuned in to who knows what they're talking about and who does not just by way of how I feel about their arguments. Browne hasn't convinced me yet.
For obvious reasons it has soured me somewhat about Fail Safe Investing (which is on its way in the mail).
-----------------
It has also come to my attention that the soil in the Copenhagen area is to contaminated that it's not advisable to grow your own vegetables and eat them.
FuuuuUUUUUUUUU!!!
'will need to check up on that though.

It looks like we're actually buying a house. A house that will cut our housing expenses down to 40% of their current level as soon as the loan is paid out. Paying the loan back should take about 1.5 year or so, then we're on the fast track towards an 80% savings rate...

GF was hospitalized, had her appendix removed, the little one is VERY MUCH 2 years old and is tremendously demanding, which is an issue since GF is post-op and cant' lift a thing around the house. I'm ridiculously swamped in course work with machine learning and generalized statistical modelling, aaaaaand we're buying a house soon.

My calender is literally booked from 6:20 in the morning to 21:30 where I collapse in bed and sleep 'like a baby' until the alarm wakes me again.

Whenever I log on to the ERE forums, I see new book recommendations and the list of things to-read is growing rapidly at the moment so I'd better just stay away until I truly have the time to spare.
This SHOULD be the last post from me for a couple of months.

Daughter is home sick so I now have the time to update this WIP on my WIP on actually getting freakin' started towards FI.

We DID buy the house! Turns out the neighborhood is optimal for children, meaning TONS of free and interesting activities for children aged 3--18!
The rent is ridiculously low for Copenhagen standards (3200 DKr for a 90m2 house).
Projected savings rate is thus close to 75%. Quality of neighborhood for children: 100%

So I've read about 200 pages on Danish tax laws and I'm only slightly wiser as to where things go. It's a jungle, and it's irritating me to no extent.
It seems, actually, that I will have to construct a portfolio that goes completely ass-backwards and if I were to give it a name it'd be:

The Taxation-directed Value Averaged Global, Two-Step, nine-to-five Crowbar Portfolio(*)
Rather than build a portfolio based on risk tolerance I will have to address the actual taxation of my gains, before I can begin to address volatility.
The reason is that bond pay directly into the same bin as my personal income. Dividends and capital gains from stocks go into a separate bin.
Now, since I'm still working the 44000 DKr tax deduction is already used by wages and so I'll have to build the volatile assets first i.e the stock portion of my portfolio. That's the Tax-directed Crowbar. Let volatility work for as long as possible, then add stable income once equities are in place (that's the two-step process).
Now, stocks are taxed 27% or 42% depending on your stock-related income. Up to about 50000 DKr is taxed at 27% the rest at 42%. Thus, my pain threshold is at the estimated 50000 per year. Assuming the historical 11% nominal income, I get 460000 DKr needed in stocks indexes to meet the taxation criterion. A Danish investment firm has an index that tracks the 2500 biggest companies in the world a 0.57% annual expenses (That's the global part of the portfolio) so I'm looking to build the stock portion from that and bit of small Cap USA and small cap EU. The stock split will probably be 5/5/30 between the small caps and the global stocks.

Bonds will potentially be split into short-term, intermediate term and some form of high-yield bonds (to emulate the 'missing' equities) so the portfolio's overall balance is closer to 50/50 in terms of the regular bonds/stocks allocation.
Now when I do become FI, the 44000 DKr tax deduction is where all interest from bonds will go, furthermore there used to be a straight 8% tax on ANY kind of income, but for interest that is no longer the case so I'm hoping to make all my bond-related money tax free!
Given a historical return of 5% on bonds I'm guesstimating a total need for 880000 DKr in bonds to fill the bonds-bracket.
Soo about 9K in bonds 5K in stocks and you have the 9-5 part of the portfolio.

The stock and bond portion will be build using Value averaging as far as possible, I haven't made up my mind whether to use the no-sell value averaging or the 'true' value averaging approach.

This is the maximum size of a personal portfolio given this simple approach to investing that doesn't have to pay more than 42% taxes. The theoretical yield is up to: 80500 DKr per year which is absolutely freaking adequate for FI so I'm actually aiming for much less than that, but until I actually quit a paying job, I can only make optimum use of dividends and capital gains, not interest...

The final twist is that I'll most likely have to build up a straight equity portfolio while accumulating and then slowly bleed money from equities and savings over into bonds while transitioning to FI. I have no (read: zero) clue how to do this best. Investing 460000 in stocks can be done in about two/three years (I'd think) depending on how fast my GF can pay me back the money I've borrowed her.

(*) I don't suspect the acronym TDVAGLOB9to5 will catch on any time soon.

Last edited by FBeyer on Mon Jun 13, 2016 12:21 pm, edited 1 time in total.

Fun Fact: I used to be a very prolific and humorous writer. I was actually part of a small "blogosphere" in DK and was invited to write a recurring guest column for a magazine that shall not be named for now
These days I only write about money and complain in writing about how boring life is.

That's where life has taken me...
Fuck this.

Also I just wanted to let you all know that some people make, presumably because other people buy, glass lobsters.

(*) Which is peanuts compared to trying to translate "retired" into Danish -> "pensionist" (connotates old geezer being put out to pasture) or much worse: "retired early" -> "f0rtidspensionist" (connotates taking disability SS-payments in the US).